Electric utility AES Corp. (AES) said Friday that its third quarter profit increased from last year, helped by higher margins at generation businesses in Chile and in the Philippines. The company also said it will raise $1.58 billion in new equity by selling 15% stake to the Chinese government's investment division, China Investment Corp. Looking ahead, the company raised its earnings outlook for fiscal 2009.
Net income attributable to AES was $185 million or $0.28 per share for the third quarter, up from $145 million or $0.22 per share in the prior year quarter.
The Arlington, Virginia-based company posted net profit of $440 million, compared to $359 million in the third quarter of 2009.
Adjusted for mark-to-market, currency transaction and disposition/acquisition changes, earnings fell 16% to $0.26 per share from $0.31 per share in the previous year quarter.
On average, 3 analysts polled by Thomson Reuters expected the company to report earnings of $0.26 per share for the third quarter. Analysts' estimates typically exclude special items.
Consolidated gross profit for the quarter grew to $1.01 billion from $962 million a year earlier. Proportional gross profit fell to $555 million from $601 million, due to the unfavorable impact of foreign exchange rates, as well as lower volumes at the company's generation business in New York and its integrated utility in Indiana, IPL.
Third quarter revenues decreased to $3.84 billion from $4.32 billion in the same quarter last year, hurt by the strengthening of the U.S. Dollar relative to foreign currencies, and lower commodity input prices.
Paul Hanrahan, AES president and chief executive officer, said, "The strong quarterly performance was driven by higher margins at our generation businesses in Chile and in the Philippines. Contributions from these businesses helped us offset weak results at our North American operations which were negatively impacted by lower volumes."
Geographically, Latin America-Generation revenues dropped 16% to $1.01 billion, while revenue at the utility segment grew 4% to $1.67 billion.
North America-Generation generated $486 million in revenues, down 21% over a year ago, while Utilities brought in $266 million in the region, a 7.6% drop from the previous year.
Europe-Generation revenues declined 40% to $157 million. Revenue from Asia-Generation slipped 22% to $291 million.
In a separate development, AES said it has entered into a binding stock purchase agreement with a wholly-owned investment subsidiary of China Investment Corp. or CIC to raise $1.58 billion of new equity.
At close, CIC will acquire 125.5 million shares of AES stock for $12.60 per share for an approximate 15% stake in the company.
AES expects to use the new equity to fund growth opportunities and extend its global leadership in the power sector.
The stock purchase agreement is subject to completion of regulatory reviews and receipt of applicable approvals. The company expects to receive necessary approvals during the first half of 2010.
AES also signed a letter of intent with CIC to raise an additional $571 million of equity for an approximate 35% interest in its wind generation business.
For the nine-month period of 2009, net income attributable to AES was $706 million or $1.06 per share, down from $1.3 billion or $1.87 per share in the previous year period.
Adjusted earnings remained flat at $0.91 per share for the period.
Revenues for the period declined to $10.71 billion from $12.53 billion in the prior year period.
For 2009, AES increased midpoint of its adjusted earnings guidance by $0.01 to $1.09 per share. The company now expects earnings of $1.07 to $1.11 per share, up from its previous forecast of $1.05 to $1.10 per share. Street estimates the company report earnings of $1.10 per share for the year.
The company also raised midpoint of earnings from continuing operations by $0.04 to $1.22 per share. The company currently expects earnings from continuing operations of $1.20 to $1.24 per share, compared to prior expectation of $1.15 to $1.20 per share.
AES is currently trading at $14.40, up 54 cents or 3.90% on a volume of 6.09 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.